United Therapeutics Corporation Reports Second Quarter 2011 Financial Results
"I'm pleased with the successful unblinding of the FREEDOM-M study this quarter, as well as the very good operating results we achieved," remarked
Total revenues for the quarter ended
Results for the three- and six-month periods ended
(1) See definition of earnings before non-cash charges, a non-GAAP financial measure, and a reconciliation of net income to earnings before non-cash charges below.
Financial Results for the Three Months Ended
Revenues
The table below summarizes the components of net revenues (dollars in thousands):
Three Months Ended June 30, Percentage 2011 2010 Change Cardiopulmonary products: Remodulin$ 104,894 $ 96,367 8.8% Tyvaso 61,809 29,483 109.6% Adcirca 16,843 8,589 96.1% Other 205 282 (27.3)% Total net revenues$ 183,751 $ 134,721 36.4%
Revenues for the quarter ended
Expenses
The table below summarizes research and development expense by major project and non-project components (dollars in thousands):
Three Months Ended June 30, Percentage 2011 2010 Change Project and non-project component: Cardiopulmonary$ 24,490 $ 18,619 31.5% Share-based compensation (9,555) 1,420 (772.9)% Other 9,305 8,548 8.9% Total research and development expense$ 24,240 $ 28,587 (15.2)%
Cardiopulmonary. The increase in expenses related to our cardiopulmonary projects for the quarter ended
Share-based compensation. The decrease in share-based compensation for the quarter ended
The table below summarizes selling, general and administrative expense by major categories (in thousands):
Three Months Ended June 30, Percentage 2011 2010 Change Category: General and administrative$ 24,268 $ 18,754 29.4% Sales and marketing 17,072 12,900 32.3% Share-based compensation (17,484) (2,000) (774.2)% Total selling, general and administrative expense$ 23,856 $ 29,654 (19.6)%
General and administrative. The increase in general and administrative expenses for the quarter ended
Sales and marketing. The increase in sales and marketing expenses for the quarter ended
Share-based compensation. The decrease in share-based compensation for the quarter ended
2011 Revenue Guidance
We reaffirm our full-year revenue guidance for our three commercial products (Remodulin, Tyvaso and Adcirca), and we continue to expect related revenues to fall within a range of 5% above or below
Earnings Before Non-Cash Charges
Earnings before non-cash charges is defined as net income, adjusted for the following non-cash charges, as applicable: (1) interest; (2) income taxes; (3) license fees; (4) depreciation and amortization; (5) impairment charges; and (6) share-based compensation (stock option and share tracking award expense).
A reconciliation of net income to earnings before non-cash charges is presented below (in thousands, except per share data):
Three Months Ended June 30, 2011 2010 Net income, as reported$ 73,891 $ 37,707 Adjust for non-cash charges: Interest expense 5,431 4,759 Income tax expense 35,723 19,212 License fees — — Depreciation and amortization 4,837 4,582 Impairment charges 609 — Share-based compensation (27,037) (574) Earnings before non-cash charges$ 93,454 $ 65,686 Earnings before non-cash charges per share: Basic$ 1.61 $ 1.17 Diluted$ 1.49 $ 1.09 Weighted average number of common shares outstanding: Basic 58,180 56,047 Diluted 62,756 60,393
Conference Call
We will host a half-hour teleconference on
This teleconference is also being webcast and can be accessed via our website at http://ir.unither.com/events.cfm.
About
Non-GAAP Financial Information
This press release contains a financial measure, earnings before non-cash charges, that does not comply with
We use earnings before non-cash charges to assist us in: (1) planning, including the preparation of our annual operating budget; (2) allocating resources to enhance the financial performance of our business; (3) evaluating the effectiveness of our operational strategies; and (4) evaluating our capacity to fund capital expenditures and expand our business. We believe this non-GAAP financial measure enhances investors' understanding of our financial results by excluding certain expenses that we do not consider when evaluating and comparing the performance of our core operations and making operating decisions. In addition, we have historically reported earnings before non-cash charges to investors, and believe the inclusion of this non-GAAP financial measure provides investors with a consistent method of comparison to historical periods. However, there are limitations in the use of this non-GAAP financial measure in that it excludes certain operating expenses that are recurring in nature. In addition, our calculation of this non-GAAP financial measure may differ from the methodology used by other companies. The presentation of this non-GAAP financial measure should not be considered in isolation or as a substitute for our financial results prepared in accordance with GAAP. A reconciliation of net income, the most directly comparable GAAP financial measure, to earnings before non-cash charges can be found in the table above under the heading, Earnings Before Non-Cash Charges.
Forward-looking Statements
Statements included in this press release that are not historical in nature are "forward-looking statements" within the meaning of the Private Securities Litigation Reform Act of 1995. Forward-looking statements include, among others, our expectations about future operating results and the demand for our products, including our guidance for annual revenues. These forward-looking statements are subject to certain risks and uncertainties, such as those described in our periodic reports filed with the
Remodulin and Tyvaso are registered trademarks of
Adcirca is a registered trademark of Eli Lilly and Company.
UNITED THERAPEUTICS CORPORATION CONSOLIDATED STATEMENTS OF OPERATIONS (In thousands, except per share data) Three Months Ended Six Months Ended June 30, June 30, 2011 2010 2011 2010 (Unaudited) (Unaudited) Revenues: Net product sales$ 183,546 $ 134,439 $ 345,764 $ 260,071 License fees 205 282 499 564 Total revenues 183,751 134,721 346,263 260,635 Operating expenses: Research and development 24,240 28,587 71,947 63,055 Selling, general and administrative 23,856 29,654 82,118 75,106 Cost of product sales 21,162 15,261 40,900 28,984 Total operating expenses 69,258 73,502 194,965 167,145 Operating income 114,493 61,219 151,298 93,490 Other (expense) income: Interest income 839 802 1,504 1,746 Interest expense (5,431) (4,759) (10,841) (9,446) Equity loss in affiliate (30) (44) (67) (91) Other, net (257) 93 (1,023) 318 Total other (expense) income, net (4,879) (3,908) (10,427) (7,473) Income from continuing operations before income taxes 109,614 57,311 140,871 86,017 Income tax expense (35,723) (19,345) (47,622) (29,106) Income from continuing operations 73,891 37,966 93,249 56,911 Discontinued operations: (Loss) income from discontinued operations, net of tax — (259) 76 (275) Loss on disposal of discontinued operations, net of tax — — (3,044) — Loss from discontinued operations — (259) (2,968) (275) Net income$ 73,891 $ 37,707 $ 90,281 $ 56,636 Net income per common share: Basic Continuing operations$ 1.27 $ 0.68 $ 1.61 $ 1.03 Discontinued operations$ 0.00 $ (0.01) $ (0.05) $ (0.01) Net income per basic common share$ 1.27 $ 0.67 $ 1.56 $ 1.02 Diluted Continuing operations$ 1.18 $ 0.63 $ 1.49 $ 0.96 Discontinued operations$ 0.00 $ (0.01) $ (0.05) $ (0.01) Net income per diluted common share$ 1.18 $ 0.62 $ 1.44 $ 0.95 Weighted average number of common shares outstanding: Basic 58,180 56,047 57,968 55,411 Diluted 62,756 60,393 62,525 59,548
SELECTED CONSOLIDATED BALANCE SHEET DATAJune 30, 2011 (Unaudited, In thousands) Cash, cash equivalents and marketable securities (excluding restricted amounts of$5.1 million )$ 887,417 Total assets 1,578,740 Total liabilities and common stock subject to repurchase 576,397 Total stockholders' equity 1,002,343
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